Should directors focus on cash flow or the environment?
The world may be facing a deepening economic crisis—70,000 jobs were lost in the US and Europe in one day, while the Institute of International Finance predicted the collapse of world economic growth and capital flows this year—but does that mean companies should put green issues to the bottom of the agenda? Some Director readers think so. Who cares about reducing your carbon footprint, they suggest, when you're struggling with cashflow?
But research conducted by communications consultancy Gyro International has revealed that consumers want to see companies do more green R&D, that the younger generation is willing to pay more for a greener future and that people accept that they will be recycling more, driving less, and buying more local produce over the next two years. In essence, the report said, there's a gap between what business presumes, and the values and opinions of the consumer.
Which is why, at Gyro's recent green business roundtable, representatives from companies and organisations as diverse as Shell, Google, Coca-Cola Enterprises, Proctor & Gamble and the Carbon Trust were earnestly discussing how they could market their green credentials to consumers more effectively and banish the spectre of greenwashing from their cynical minds (the research found that 49 per cent of the 1,866 consumers surveyed were untrusting of corporate environmental claims).
The spotlight fell on marketing directors—150 from across the UK, US and mainland Europe were interviewed. But it's widely understood that the responsibility for gauging consumer feeling and creating loyalty must be shared across the board. If companies lack leadership from their CEO, what the rest of the business does is redundant; market share could be lost.
The Carbon Trust has consistently argued that moving to a low carbon economy is not only vital for the environment but also a significant business opportunity. But for the B2C and B2B companies attending this discussion, the issue was far from black and white. At what point will the consumer baulk at premium prices for green products, for example? Is what they say actually what they do—what trade-off will they make? At what point should more legislation be imposed upon consumers and businesses, or will that cramp innovation? Should the focus be on education and collective responsibility instead?
Meanwhile, Google was on a damage limitation exercise after an article published in The Sunday Times about the environmental impact of its searches (the newspaper has since added a clarification). The search firm claims to be committed to a "clean energy future" and says it has taken steps to reduce the carbon footprint of its operations.
UK director Matt Brittin added: "It was claimed that a typical Google search uses as much energy as boiling half a kettle of water and produces seven grams of CO2. Our research showed that this was many times too high. Search queries may vary in degree of difficulty, but Google is fast—for the average query, the servers it touches each work on it for just a few thousandths of a second, returning a search result in less than a fifth of a second—meaning a single search generates only around 0.2 grams of greenhouse gas."
Posted 29 January 2009 : Director.co.uk
